Here at BreakPoint black, we do a lot of work with clients on their contract renewal negotiation strategies.
For many businesses, contract renewals are a key building block to the continued rise of the company. Retaining the existing customers while sales teams work hard on bringing in new business supports that steady growth curve.
However, when we ask the question: are you getting as much value from this contract as you’d like, invariably, the answer is ‘no’.
Contract renewal negotiations have a number of novel factors to account for - these include:
Expectations of buyer and seller influenced by precedent
A product now embedded into the fabric of how a business and its teams are operating
A timeline characterised by a looming deadline
Defensive tendencies of commercial teams focussing on not losing what they have as opposed to securing the value they are already missing
Too often, commercial teams are sent out to seek the renewal signature for another 12 months without a comprehensive negotiation plan designed to generate new value from and for an existing customer.
With our involvement in this planning process, we combine essential components of effective negotiation to take control of the renewal process, maximise value and steepen the business’ growth curve.
In our crosshairs within this process are the following elements:
Precise timeline planning, well in advance of any contract renewal discussions
A positioning plan to utilise each and every interaction with the customer to nudge and shift expectations to where we need them to be
A coordinated, multi-faceted information gathering plan. Information is power and we plan conscious intelligence gathering to feed the entire negotiation process. Each and every interaction is a critical opportunity to get inside their head, identify new negotiation variables and understand their respective value to each party
People mapping. We negotiate with people, not organisations. We carefully assess the drivers of each individual in the negotiation process and their likely decision making and behavioural factors
Negotiation execution plan – everything we do, we do for a reason. Each interaction, negotiation behaviour and proposal is planned with precision. Then we follow that plan.
So, as your contract renewals approach, don’t leave it to chance, don’t just settle for a signature, make a professional negotiation plan and maximise the value for your business and theirs.